HomeMy WebLinkAboutMINUTES - 06282011 - C.39RECOMMENDATION(S):
SUPPORT Assembly Bill 509 (Skinner): Federal Earned Income Tax Credit: Notification, a
bill that will expand existing legislation to require state departments and agencies that serve
low-income Californians to notify their program recipients that they may be eligible for the
Earned Income Tax Credit, as recommended by the Legislation Committee.
FISCAL IMPACT:
Potential impact on the state's economy. In 2009, 800,000 Californians failed to claim over
$1.2 billion worth of Earned Income Tax Credit dollars. The author argues that if these
refunds were claimed, they would spur over $1.2 billion in business sales, pay $311 million
in wages, and add nearly 7,500 jobs to the California economy, which would result in $88
million dollars in taxes coming back to the state. This economic stimulation could be a huge
benefit to California, given the current budget crisis.
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 06/28/2011 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Gayle B. Uilkema, District II
Supervisor
Mary N. Piepho, District III
Supervisor
Karen Mitchoff, District IV
Supervisor
Federal D. Glover, District V
Supervisor
Contact: Lara DeLaney,
925-335-1097
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board
of Supervisors on the date shown.
ATTESTED: June 28, 2011
David Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc:
C. 39
To:Board of Supervisors
From:Legislation Committee
Date:June 28, 2011
Contra
Costa
County
Subject:SUPPORT AB 509 (Skinner): Federal Earned Income Tax Credit: Notification
BACKGROUND:
Summary: AB 509 requires state departments and agencies that serve individuals
qualified for the federal earned income tax credit to notify program recipients that they
may be eligible for the credit in a specified manner. Requires state departments and
agencies that do not directly communicate with persons who may qualify for the EITC to
communicate indirectly through agencies or districts serving those persons.
The author provided the following statement: "AB 509 will expand existing legislation to
require state departments and agencies that serve low-income Californians to notify their
program recipients that they may be eligible for the EITC. In recognizing the unique
capacities of each affected state department and agency, this bill allows the departments
and agencies to conduct the annual notification during a regularly schedules contact with
a recipient by telephone, mail, electronic communication, or by an in-person visit.
"The Earned Income Tax Credit (EITC) is a federal tax credit for low to moderate income
individuals and families that can put anywhere from a few hundred dollars to $5,600 in
their pockets. Congress originally approved the tax credit legislation in 1975 in part to
offset the burden of social security taxes and to provide an incentive to work. When EITC
exceeds the amount of taxes owed, it results in a tax refund to those who claim and
qualify for the credit. President Ronal Reagan famously called the tax credit, "the best
anti-poverty, the best pro-family, the best job creation measure to come out of Congress."
The Legislation Committee considered this bill at its June 20, 2011 meeting and
recommends that the Board of Supervisors support the bill.
STATUS:
02/15/2011 INTRODUCED.
03/25/2011 To ASSEMBLY Committee on REVENUE AND TAXATION.
03/25/2011 From ASSEMBLY Committee on REVENUE AND TAXATION with
author's amendments.
03/25/2011 In ASSEMBLY. Read second time and amended. Re-referred to Committee
on REVENUE AND TAXATION.
05/02/2011 From ASSEMBLY Committee on REVENUE AND TAXATION: Do pass
to Committee on APPROPRIATIONS.
05/27/2011 From ASSEMBLY Committee on APPROPRIATIONS: Do pass as
amended.
05/27/2011 In ASSEMBLY. Read second time and amended. To second reading.
05/31/2011 In ASSEMBLY. Read second time. To third reading.
06/01/2011 In ASSEMBLY. Read third time. Passed ASSEMBLY. *****To SENATE.
06/08/2011 To SENATE Committee on GOVERNANCE AND FINANCE.
HEARING: 06/29/2011 9:30 am, Room 112
CONSEQUENCE OF NEGATIVE ACTION:
If the Board of Supervisors does not act on the bill, the County will not be on record with
its position and will be unable to advocate for its passage.
CHILDREN'S IMPACT STATEMENT:
None.
ATTACHMENTS
Bill Text AB 509
AMENDED IN ASSEMBLY MAY 27, 2011
AMENDED IN ASSEMBLY MARCH 25, 2011
california legislature—2011–12 regular session
ASSEMBLY BILL No. 509
Introduced by Assembly Member Skinner
February 15, 2011
An act to amend Sections 19851, 19852, and 19853 of the Revenue
and Taxation Code, relating to taxation.
legislative counsel’s digest
AB 509, as amended, Skinner.Federal earned income tax credit:
notification: state departments and agencies.
The federal income tax law authorizes a refundable earned income
tax credit for certain low-income individuals who have earned income
and who meet certain other requirements. Existing California law
requires an employer, as defined, to notify all employees that they may
be eligible for the federal earned income tax credit (EITC), as specified.
This bill would also require state departments and agencies that serve
those qualified who may qualify for the EITC, as defined, to notify their
program recipients that they may be eligible for the EITC, at least once
a year during the months of January through April, or alternatively, to
provide this annual notification during a regularly scheduled contact
with a recipient by telephone, mail, or electronic communication, or by
an in-person communication, as specified.This bill would also require
state departments and agencies that do not directly communicate with
persons who may qualify for the EITC to communicate indirectly through
agencies or districts serving those persons.
97
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
The people of the State of California do enact as follows:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
SECTION 1.Section 19851 of the Revenue and Taxation Code
is amended to read:
19851.The Legislature finds and declares as follows:
(a) Congress created the federal earned income tax credit (EITC)
in 1975 to offset the adverse effects of the Medicare and social
security payroll taxes on working poor families and to encourage
low-income workers to seek employment rather than welfare.
(b) Due to a relatively low percentage of federal earned income
tax credit eligible persons that who participate in the federal Earned
Income Tax Credit program, hundreds of millions of federal dollars
go unclaimed by the working poor in California.
(c) In order to alleviate the tax burden on working poor persons
and families, to enhance the wages and income of working poor
persons and families, to ensure that California receives its share
of the federal money available in the federal Earned Income Tax
Credit program, and to inject additional federal money into the
California economy, the state shall facilitate the furnishing of
information to working poor persons and families regarding the
availability of the federal earned income tax credit so that they
may claim that credit on their federal income tax returns.
(d) It is the intent of this act to offer the most cost-effective
assistance to eligible taxpayers through the following:
(1) Notices provided by their employers.
(2) Notices provided by state departments and agencies that
serve those qualified who may qualify for the EITC.
SEC. 2.Section 19852 of the Revenue and Taxation Code is
amended to read:
19852.For purposes of this part, the following terms have the
following meanings:
(a) “Employer” means any California employer who is subject
to, and is required to provide, unemployment insurance to his or
her employees, under the Unemployment Insurance Code.
(b) “Employee” means any person who is covered by
unemployment insurance by his or her employer, pursuant to the
Unemployment Insurance Code.
97
— 2 —AB 509
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
(c) “EITC” means the federal earned income tax credit, as
defined in Section 32 of the Internal Revenue Code.
(d) “State departments and agencies that serve those qualified
who may qualify for the EITC” means those departments and
agencies that operate state or federally funded programs primarily
engaged in providing services to low-income individuals and
families. Departments, agencies, and programs under this
subdivision may include, but are not limited to, the following:
(1) The California Health and Human Services Agency.
(2) The State Department of Public Health.
(3)
(1) The State Department of Education: free or reduced-price
meal program and National School Lunch Program.
(4)
(2) The State Department of Social Services: the CalWORKs
program, CalFresh, Foster Families and foster families.
(5) The Department of Veterans Affairs.
(6)
(3) The Public Utilities Commission: California Alternate Rates
for Energy, the Energy Savings Assistance Program, Payment
Plans, and Emergency Payment Assistance Programs, including
Family Electric Rate Assistance, the California Weatherization
Assistance Program, the Low Income Home Energy Assistance
Program, the California LifeLine Telephone Program, and Link-Up.
(7) Department of Insurance: California’s Low Cost Auto
Insurance Program.
(8)
(4) Employment Development Department: California
Unemployment Insurance.
(9)
(5) State Department of Health Care Services: the Medi-Cal
program.
(10)
(6) Managed Risk Medical Insurance Board (MRMIB): the
Healthy Families Program.
(11) California Student Aid Commission.
SEC. 3.Section 19853 of the Revenue and Taxation Code is
amended to read:
19853.(a) An employer shall notify all employees that they
may be eligible for the EITC within one week before or after, or
97
AB 509— 3 —
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
at the same time, that the employer provides an annual wage
summary, including, but not limited to, a Form W-2 or a Form
1099, to any employee.
(b) The state departments and agencies that serve those qualified
who may qualify for the EITC, as defined in subdivision (d) of
Section 19852, shall notify their program recipients that they may
be eligible for the EITC, at least once a year during the months of
January through April, or alternatively, shall provide this annual
notification during a regularly scheduled contact with a recipient
by telephone, mail, or electronic communication, or by an in-person
communication. State departments or agencies that do not directly
communicate with persons or households with persons who may
qualify for the EITC may communicate indirectly through agencies
or districts that serve eligible persons or households with eligible
persons. Departments, agencies, and programs are encouraged to
develop the least costly, effective method to provide notice to
recipients of EITC eligibility, which method shall meet the
requirements of Section 19854.
(c) The employer shall provide the notification required by
subdivision (a) by handing directly to the employee or mailing to
the employee’s last known address either of the following:
(1) Instructions on how to obtain any notices available from the
Internal Revenue Service for this purpose, including, but not
limited to, the IRS Notice 797 and Form W-5, or any successor
notice or form.
(2) Any notice created by the employer, as long as it contains
substantially the same language as the notice described in
paragraph (1) or in Section 19854.
(d) The employer shall not satisfy the notification required by
subdivision (a) by posting a notice on an employee bulletin board
or sending it through office mail. However, these methods of
notification are encouraged to help inform all employees of the
EITC.
(e) Every employer shall process, in accordance with federal
law, Form W-5 for advance payments of the EITC, upon the
request of the employee.
O
97
— 4 —AB 509